Real estate firms were the major corporate bond issuers in the market in January, according to updates from SSI Securities Corporation.

 

SSI’s statistics showed that real estate firms issued bonds worth VNĐ7.36 trillion (US$317.2 million) in January, accounting for 55 per cent of the total value of corporate bonds issued in the market.

 

In comparison, the value of corporate bonds issued by banks in January accounted for just 2.1 per cent of the total issuance value, while energy and mining firms 2.7 per cent and infrastructure development firms 1.9 per cent

 

Corporate bonds of real estate firms had average yields of 11.78 per cent per year and average term of 4.98 years.

 

More than VNĐ7.36 billion worth of corporate bonds issued in January came from only seven real estate companies.

 

Notably, Paradise Golf Development Joint Stock Company had the highest bond value issued in January, worth VNĐ2.68 trillion, with 10-year terms and average yield of 11.5 per cent.

 

Among the seven real estate firms, City Garden Joint Stock Company issued bonds at the highest yield of 13.3 per cent per year.

 

Other issuers were APEC Land Huế, Cù Lao Chàm Trading-Tourism and Investment Joint Stock Company, Phú Thượng Construction and Investment Joint Stock Company, Phú Hưng Real Estate Investment Company and TNR Holdings.

 

Real estate firms tended to issue bonds as a channel to raise capital as credit in the property sector was being tightened.

 

As the corporate bond market was overheating in recent years, the Ministry of Finance was planning to make regulations on corporate bond issuance more stringent, including regulations related to conditions for corporate bond issuance, rates, issuance approach in domestic and international markets, information disclosure and reporting mechanism.

 

Statistics from Hà Nội Stock Exchange showed that 211 firms issued bonds worth a total of VNĐ280 trillion in 2019, up by 25 per cent compared to 2018.

 

The scale of Việt Nam’s corporate bond market expanded from 9.01 per cent of the country’s gross domestic product (GDP) in 2018 to 11.3 per cent GDP in 2019 with a total of nearly VNĐ670 trillion worth of corporate bonds in circulation.

 

SSI’s statistics showed that the total corporate bond value issued by real estate firms in 2019 reached VNĐ106.5 trillion, or 38 per cent of the total issuance value, only after banks. — VNS